Author: Biteye, Core Contributor LouisWang
*The full text is about 4800 words, with an estimated reading time of 10 minutes
Bitcoin Ecosystem Holds Enormous Potential
As the cornerstone of the entire cryptocurrency industry, Bitcoin's current market value has reached $874.8 billion, but most of the time it is only seen as a "cryptographic gold" for storing value.
WBTC, as one of the few ways for Bitcoin to enter the DeFi field, is an ERC20 asset 1:1 mapped by the centralized custodian BitGo, with a current market value of $7 billion, which is less than 1% of Bitcoin's market value.
Therefore, there is actually a large amount of untapped liquidity in the Bitcoin network, and the native ecosystem of Bitcoin has enormous potential momentum.
Contrary to widely held beliefs, the Bitcoin network does support smart contracts. It is just that for security and simplicity considerations, the supported smart contract programming language, Script, while not Turing complete and not as powerful as Solidity commonly used on the EVM, still supports functions such as multi-signature, time locks, and partially signed Bitcoin transactions (PSBT).
The SegWit (Segregated Witness) upgrade gave witness data (the signature information unlocking UTXO transactions) independent segregated space, with a capacity of up to 4MB, expanding the types of media stored on the chain.
The Taproot upgrade enhances transaction privacy and allows Bitcoin to execute more complex transactions, enabling data to be stored in the spending script path of the Taproot script, all of which have driven the birth of subsequent Ordinals protocols, giving rise to the distribution of new types of assets and the prosperity of Bitcoin new assets such as BRC20, redirecting people's attention back to the potential of the Bitcoin ecosystem.
On-Chain Ecosystem Nourishing the Bitcoin Network
Many Bitcoin OGs insist that Bitcoin should remain simple and pure, playing the role of a value reserve. However, a lack of on-chain activity can actually be harmful to Bitcoin.
Taking the upcoming Bitcoin halving as an example, the current 6.25 BTC reward per block will be halved, meaning that miners' income will be greatly reduced. If expenses exceed income, it will naturally lead to a reduction in the number of miners, a decrease in decentralization, and an increase in vulnerability to attacks.
There are only two solutions to avoid this situation: an increase in the price of Bitcoin (even if the price of Bitcoin doubles, the block reward income will only balance out with the current level); or on-chain activities bringing in more transaction fees, which has already been verified by the Ordinals protocol and BRC20.
BRC20 has led to two waves of significant increases in BTC miner income in May and December. So far, the Ordinals protocol has brought BTC miners 5979.4 BTC (~$257.7M) in income, far exceeding miners' coinbase earnings.
Bitcoin developers often use the number of full nodes as a measure of network security. In order for individual PCs to run full nodes, block size and UTXO set need to be strictly limited to reduce the cost of full nodes.
From the perspective of the number of BTC full nodes, the appearance of inscriptions has led to an increase in the number of people needing to interact with Bitcoin RPC, increasing the number of Bitcoin full nodes.
It is clear that the BTC network needs to be empowered by the ecosystem. Rich on-chain activities not only bring economic benefits to miners, compensating for the losses after the halving, but also increase the number of full nodes, enhance network security, and, most importantly, enable more people to truly understand and use BTC.
B² Network Unleashing the Potential of BTC
The lack of applications for BTC is due not only to the limitations of smart contract languages, but also to the fact that BTC itself is slow and expensive.
On Ethereum, the essential means of Layer 2 scaling is the modular blockchain approach, which separates the execution layer to improve efficiency while inheriting the security of the Ethereum network.
The past year has also been a big year for Ethereum Layer 2, with over 20 Ethereum Layer 2 public chains landing, and the concept of Layer 2 has become deeply ingrained.
If we want to unleash the potential of Bitcoin, a natural approach is to build a Layer 2 network for scaling, using an efficient and fast virtual machine, or the more familiar EVM as the execution layer, to compensate for some of BTC's shortcomings.
B² Network is a pioneer of a BTC Layer 2 network, based on Bitcoin zero-knowledge proof verification commitments and EVM-compatible ZK Rollup, bringing Ethereum's talents to the Bitcoin ecosystem.
Technical Architecture
The technical architecture of B² Network mainly consists of two layers: the Rollup layer and the DA layer. Simply put, there needs to be a virtual machine to process user transactions, and a place to store and verify transactions.
In the Rollup layer, B² adopts the zkEVM solution and, together with Polygon Labs, extends the Polygon CDK to BTC.
Through account abstraction, users can interact with both Ethereum and BTC accounts, catering to the habits of both ecosystems. Common wallets such as Uniswap and Metamask can continue to be used, reducing the learning cost for users; the main account can use the Transaction Bundler service to pay gas for sub-accounts.
User transactions are submitted and processed in the Rollup layer, and user states are also stored in the Rollup layer. The network generates relevant zero-knowledge proofs, packages them, and sends them to the DA layer for storage and verification.
The DA layer includes decentralized storage, B² nodes, and the Bitcoin network, used to verify the zero-knowledge proofs of Rollup, permanently store copies of Rollup layer data, and finally imprint the data onto the Bitcoin network in an inscribed manner.
The entire data flow is shown in the following figure, with B²'s sequencer packaging user transaction data and saving it through distributed storage to avoid single point of failure and increase reliability.
To ensure data availability, B² will write Tapscript scripts to the Bitcoin network in each block, achieving temporal continuity of data availability.
(Source: B² Network LitePaper)
In the Ethereum network, Rollup uses calldata to pass Layer 2 network data to the mainnet contract for transaction verification and data storage. However, the Bitcoin network does not support automatic smart contract verification. ZK-Rollup only writes zero-knowledge proofs and aggregated data to Bitcoin through Taproot, ensuring that ZK-Rollup data is anchored in Bitcoin and cannot be tampered with.
However, it cannot guarantee the validity and correctness of transactions within ZK-Rollup, nor can it use Bitcoin's powerful consensus to ensure the security of Layer 2 ZK-Rollup.
Therefore, the solution adopted by B² is to write the commitment of zero-knowledge proofs to the mainnet, allowing challengers to initiate challenges to the commitment of zero-knowledge proof verification within a specified period.
If someone successfully challenges, Rollup will be rolled back, and the challenger will take away the assets locked by the node. If no one challenges during the challenge period or the challenge fails, Rollup will receive final confirmation on BTC.
(Source: B² Network LitePaper)
B²'s design is quite ingenious in several aspects:
- First, it reduces the learning threshold for users through account abstraction, effectively lowering the threshold for asset access, allowing users to use wallets on either side where they have assets.
- The Layer 2 network is EVM-compatible, making it easy to onboard developers and migrate from the Ethereum ecosystem.
- It adopts a hybrid mode similar to zk+op, using zk for data verification to reduce transaction costs, while also using op challenge mode to avoid the problem of limited BTC verification capabilities.
B² Network's vision is not limited to just a BTC Layer 2, but has the ambition to become the center of BTC Layer 2, similar to Cosmos Hub or Op Stack.
In the future, B² Nodes will be upgraded to B² Hub, which will serve developers and projects that want to build Layer 2 Rollups on the Bitcoin network, providing a data availability layer and state transition verification and proof system based on the Bitcoin network.
In the future, developers can choose the combination of Polygon CDK + B² Hub to build their own BTC Rollup.
B² Token Economy
In the design of B² Network, there are decentralized needs in multiple aspects, where token incentives exist:
Sequencer Staking
B² Network achieves decentralized sequencer services through B² nodes. Sequencers participate in sequencer validator elections by staking tokens, and this service updates the sequencer set through a mechanism similar to DPoS. Sequencers in the sequencer set provide transaction sequencing and packaging services in order.
B² Hub Revenue
When Rollup settles with BTC through B² Hub, it needs to pay B² tokens to the B² Hub. This serves as Hub revenue, and a portion will be burned.
zk Proofs
Bitcoin miners can use their computing power for zero-knowledge proofs to earn new income after the Bitcoin halving.
Storage Nodes
Distributed storage nodes are needed in the DA layer to store Rollup data copies and zero-knowledge proofs. Running storage nodes will also receive token incentives.
Governance
Token holders can vote on protocol proposals.
Staking
Users staking tokens can share a portion of the platform's gas fees.
Participation Methods
1. B² Buzz
(Source: B² Buzz)
B² Buzz is a user incentive activity launched by B² Network. Users can deposit assets from early February to three days before the mainnet launch to obtain parts for assembling mining machines, which can be used to mine the native B² token. During the activity, all funds are managed securely through multi-signature methods, and bridged assets can be withdrawn back to the first-layer network in April 2024.
Assets that can be deposited include:
- BTC: BTC on the Bitcoin network, wBTC on Ethereum, BTCB on the BNB chain
- BRC20 assets: ORDI, SATS
- ETH: ETH on Ethereum
- Stablecoins: USDC and USDT on Ethereum; FDUSD on the BNB chain
- Matic: MATIC on Polygon
More deposit rewards can be obtained through group deposits, unlocking higher-level treasure chests. By using Biteye's invitation link, https://buzz.bsquared.network/?code=kUClH, additional benefits can be obtained:
- 50% referral point sharing
- MiniBridge monthly card at 20% off
- CryptoHunt monthly card for deposits over 500U (currently valued at 0.1e)
2. B² Network Odyssey
Users can participate in Odyssey activities on the B² website. Assets deposited before the mainnet launch will be bridged to the B² mainnet and circulate within the ecosystem. Users can interact with ecosystem dapps using these bridged assets, earn more points by completing tasks, and potentially receive airdrops in the future.
(Source: B² Network Odyssey)
3. Development
B² has launched a $1 million Grant program to encourage developers to build on this new BTC Layer 2. In the first round, six projects have received grant sponsorships, including:
GlowSwap
A native DEX service for BTC-related assets on B².
Protocol X
A protocol based on Ordinals, aimed at helping more DApps and games establish their own asset systems in the BTC ecosystem.
L2scan
L2scan is a block explorer focused on L2 Rollup.
PawX
An NFT project that allows planting, breeding, trading, and chatting with other cat enthusiasts in the PawX virtual universe.
Mystic Mind
An AI-driven NFT astrology application.
Golden Fleet
A full-chain game using zk algorithms.
Conclusion
B² Network greatly expands the scalability of the BTC ecosystem by introducing an EVM-compatible BTC Layer 2.
It significantly reduces transaction fees using zk rollup and, through clever architectural design, combines a method similar to fraud proof to allow zk commitment proofs to be challenged by users, thereby addressing the limitation of the inability to contract verify on BTC Layer 1.
B²'s partners are all top projects, such as using the Particle Network solution for account abstraction and collaborating with Raas's AltLayer, and are currently working with Polygon Labs to build the first use case of Polygon CDK for BTC.
Powerful partners can also help B² become one of the most feasible Bitcoin L2 solutions, making it worth paying attention to and participating in early.
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